I interviewed Frank Arzenti who discussed Supply Action Management.
Today we're speaking with Frank Arzenti, and we're going to discuss supply action management. Frank, before we start, can you provide a brief background of yourself?
Sure. I am the director of supply chain and material support for a provider of professional development and material support for [inaudible 00:00:27] based learning and teaching focusing on STEM education — Science, Technology, Engineering, and Math. My role is that within our distribution center, we build science kits. These kits are sent to schools throughout the state of Pennsylvania and beyond, but mainly our focus is in Pennsylvania. These kits are sent to, generally, elementary age type of students, and they are leased to the customer and returned pretty much on a quarterly basis. School districts really don't have a place to store this material, nor do they want to refurbish it, nor do they want to replenish it. So to keep our costs down, and to keep their costs down, we lease these science kits to them on a quarterly basis.
My role is to really direct the flow of materials, from identifying what needs to be purchased, to sourcing it through our vendors, the receipt, and then through our warehouse management system so we can allocate inventory to the science kits that we ship to the school districts.
What kind of challenges have you faced doing this?
Internally, we have an open source ERP system that identifies demand based on any parameters that we like to do, whether it was state driven or whether it was class code driven — class codes meaning consumable items or durable items. Those are the ones that get returned,even at the kit level. So we had our parameters that we can choose. And it was pretty flexible, but it did not really provide all the information that was work-in-process nor did it identify those materials that were scheduled to be returned within that time frame that we were analyzing.
So there were several reports that we had to look at on a daily basis. You probably felt like being an air traffic controller where you had six screens open on six computers and trying to bring all this information together. So knowing that the data was there, we worked with our business technology department to try to group all this information, put it on one easy-to-understand, easy-to-process report, which has been very successful.
So we reduced our processing time of the MRP from probably four hours a day to about 30 minutes a day, and it's really been successful for us.
What would you say are the key ways to improve supply chain action management?
That was one of it because I think that our turnaround time has gotten so much smaller. Demand, we need to be almost like the Amazons, where we can turn inventory around almost at a moment's notice. And we really didn't have that luxury of trying to be able to build a timeline where we could say, "You could get this inventory in six months," which was just totally unreasonable.
Given this opportunity to go ahead and process the MRP, see our demand, create and purchase requisitions, convert them to purchase orders, and get them into the vendors hands was critical for us to maintain a competitive advantage.
How do you see supply action management changing in the near future?
I think it's just going to become more and more competitive. I think Amazon is starting to set the standard where “call today, it's on its way” and almost being delivered today. I think that what our challenges will be is to be able to identify those vendors that we work with on a regular basis, make sure we establish some really great relationships with them, forecasting it properly,so we would have that opportunity not to overbuy inventory but just to have that correct inventory at the right time in the right quantities, so we can get them moved out to our customers at a rapid pace.
Great.And thanks for sharing today, Frank.
You're quite welcome, Dustin.
About Frank Arzenti
Director -Supply Chain and Material Support